1. Ausdrinks Asia Pacific Regional Beverages Summit 2016
Changing Consumer Tastes; Seeking regional opportunities in an evolving beverages market
march 2016, Sydney

2. Regional snapshot Natural, Health & Wellness Fortified / functional export Opportunities in asia

3. Global soft drinks growth entering steady state
Regional snapshot
Global soft drinks growth entering steady state
Global soft drinks total volume grows by 3% during Global soft drinks consumption growth continues to surpass that of any other drinks industry. With a significant portion of this growth coming from often extremely low-priced bottled water, the need for sustained, profitable growth remains acute.

4. Asia Pacific accounts for a larger share of throat
Regional snapshot
Asia Pacific accounts for a larger share of throat

5. Leading geographies in Asia Pacific
Regional snapshot
Leading geographies in Asia Pacific

6. Leading soft drink categories in Asia Pacific & Australasia
Regional snapshot
Leading soft drink categories in Asia Pacific & Australasia

7. Regional snapshot Natural, Health & Wellness Fortified / functional export Opportunities in asia

8. Natural, health & wellness trends & growth drivers
What are the major growth drivers for natural and health and wellness?
Authenticity
Back to basics (traditional ingredients)
Awareness of allergies / food intolerances
Provenance
Increasing access to information through technology
Prevalence of lifestyle diseases (obesity, diabetes etc)

9. What is “natural”? No strict definition of natural
Natural, health & wellness
What is “natural”?
No strict definition of natural
Naturally Healthy Beverages naturally contain a substance that improves health and wellbeing beyond the product’s pure calorific value.
Naturally Healthy Beverages are usually a healthier alternative such as 100% fruit/vegetable juice, Superfruit juice (including cranberry juice), natural mineral water, spring water, RTD green tea, RTD oolong tea.

10. What is “better-for-you”?
Natural, health & wellness
What is “better-for-you”?
Better-for-you products refer to products where the amount of a substance considered to be less healthy (e.g. sugar, caffeine or fat) has been actively reduced or removed during production.
The “less healthy” element forms part of the positioning and/or marketing of the product.
Better-for-you includes reduced sugar, reduced caffeine and reduced fat.

11. Health & wellness soft drinks in 2015 – regional variance
Natural, health & wellness
Health & wellness soft drinks in 2015 – regional variance

12. Asia Pacific challenges Western European dominance
Natural, health & wellness
Asia Pacific challenges Western European dominance
In Asia Pacific, NH soft drinks accounts for the largest volume share (71%) of health & wellness soft drinks. This is compared with organic soft drinks, better-for-you soft drinks and fortified/functional soft drinks.

13. Bottled water and RTD tea feature heavily in NH soft drinks
Natural, health & wellness
Bottled water and RTD tea feature heavily in NH soft drinks

14. Everyday Morning Healthy Double Fibre
Natural, health & wellness
RTD Green Tea
Indonesia
Taiwan
Taiwan
Source:
Source: 7net (
Source:
Ichi Ocha
RTD green tea product from Indofood Asahi launched in Made from Ichiban tea. Increasing number of Japanese restaurants in Indonesia have boosted the popularity of “Ocha”, Japanese green tea.
Real Leaf Slim
RTD green tea product by Swire Coca-Cola Taiwan Ltd. This is a fortified extension to an existing successful brand of Japanese style RTD tea. The tea claims to improve digestive health.
Everyday Morning Healthy Double Fibre
RTD green tea by Vitalon Foods Corp launched in Fortified with chicory fibre, positioned for digestive health.

15. Natural, health & wellness
Bottled water
Asia Pacific bottled water total volume sales grew by 10% CAGR between 2010 and 2015 to reach 87 billion litres.
Asia Pacific accounts for more than double the size of North American bottled water sales in 2015.
China drives growth in Asia Pacific, representing 48% of Asia Pacific volume sales in 2015.
Water safety issues boost sales in China as consumers trade up to premium products.

16. UK Chancellor signals sugar tax
Natural, health & wellness
UK Chancellor signals sugar tax
Mexico
Mx$1/litre tax implemented in 2014 for all drinks with added sugar content. Legislators are currently considering reducing this by 50% for beverages that fall below the 5g of sugar per ml threshold.
United Kingdom
Levy to be imposed on soft drinks with more than 5g of sugar per 100ml. Higher rate for drinks with more than 8g per 100ml. Fruit juice and milk-based drinks are exempt.
Philippines
Proposed tax of approximately $0.22/litre to be levied on carbonates, energy drinks and other beverages containing added sugar.
What about fruit juice and milk-based drinks?
Is the sugar tax expected to have a negative impact on soft drink consumption?

17. Regional snapshot Natural, Health & Wellness Fortified / functional export Opportunities in asia

18. What is fortified/functional?
When identifying fortified/functional products, we focus on products to which health ingredients (typically those with health claims) have been added.
Fortified/functional beverages provide health benefits beyond their nutritional value and/or the level of added ingredients wouldn’t normally be found in that product.
The product must have been actively fortified/enhanced during production and the health benefit needs to form part of positioning/marketing of the product.

19. Fortified/functional trends & growth drivers
“energy boosting”
“hectic consumer lifestyles”
“fortified with fibre”
“overworked consumers”
“limits fat absorption from food”
“general wellbeing”
“immune support”
“calcium”
“digestive health”
“bone health”
“L-carnitine”
“weight management”
“endurance”
“vitamins”

20. Major FF soft drink categories (by volume)
Fortified / functional
Major FF soft drink categories (by volume)

21. Major FF soft drink categories (by value)
Fortified / functional
Major FF soft drink categories (by value)

22. China accounts for almost 2/3 of FF volume sales
Fortified / functional
China accounts for almost 2/3 of FF volume sales

23. Regulation FOSHU logo Japan - FOSHU
Fortified / functional
Regulation
Japan - FOSHU
Previously, strict pharmaceutical law in Japan prevented medical claims on product packaging.
MHLW introduced Food for Specified Health Uses (FOSHU) in 1991.
Manufacturers required to gain FOSHU (Foods for Specified Health Use) approval by the Ministry when they wish to claim health benefits on product packaging.
Applications must include scientific documentation demonstrating the medical or nutritional basis for a health claim.
Costly and timely burden for manufacturers to register products as FOSHU.
FOSHU logo

24. China drives growth in FF energy drinks
Fortified / functional
China drives growth in FF energy drinks

25. FF energy drinks challenges FF flavoured milk drinks
Fortified / functional
FF energy drinks challenges FF flavoured milk drinks

26. Regional snapshot Natural, Health & Wellness Fortified / functional export Opportunities in asia

27. Opportunities in Asia for Australasian businesses
export Opportunities in asia
Opportunities in Asia for Australasian businesses
Asia Pacific, particularly China’s growing appetite for high quality products represents an enormous opportunity for Australasian businesses.
Key areas within the soft drinks space highlighted today include bottled water and fortified/functional soft drinks.
Australasian businesses to capitalise on “clean”, “green” positioning as a selling point for bottled water sales in China.
Fortified/functional drinks may also offer a growth opportunity for Australasian businesses
FF energy drinks key to unlocking value
Positioning in Asia Pacific countries may be quite different to the positioning used at home
Regulation in emerging markets

28. Online sales in China, the rise and rise of Alibaba
export Opportunities in asia
Online sales in China, the rise and rise of Alibaba
Online sales in China grew by 53% in 2015 to reach US$293 billion, of which food and drink sales accounted for 7%. Online sales conducted via mobiles (i.e. smartphones) and tablets accounted for 51% of online sales in China during 2015.
February 2014 saw the launch of Tmall Global, a cross-border platform and an extension of Alibaba Group’s B2C Tmall.com business in China.
As of August 2015, around 5,400 overseas brands from 25 countries and regions had opened stores on Tmall Global which is used by a growing number of brands from the US, Germany, Australia, South Korea, Japan, Taiwan and Hong Kong as a stepping-stone into China.
Australia Post partnered with Alibaba in 2014, allowing Australian businesses to use their Australian business licenses and ship their products directly from Australia to China.

29. Food labelling regulation
export Opportunities in asia
summary
Future opportunities & threats for soft drinks in Asia + -
Demand from China
M-commerce
Bottled water
FF energy drinks
Sugar tax
Regional diversity
Food labelling regulation

30. Thank you for listening
Erika Sirimanne
Suite 401, level 4, 134 William Street, Sydney, NSW 2011